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Nissan Motor Company Ltd Building Operational Resiliency

Solution Id Length Case Author Case Publisher
2699 1663 Words (7 Pages) David Simchi Levi, William Schmidt MIT Sloan School of Management : 13-149
This solution includes: A Word File A Word File

The case highlights the 2011 earthquake disaster, which affected Japanese citizens and hit the country's overall economic situation as a number of companies suffered in the disaster. Nissan is counted among those companies that suffered massive damage, contrasting with other countries. The company handled the situation really well due to its risk management strategy. Due to the strategy, the company was able to identify plausible risk factors and address them timely. However, due to a lack of training, the process was complicated as the required skills were scarce. Nissan managed the aftermath of this disaster by restructuring its supply chain process. 

Nissan used various tactics such as empowering employees, handling production, information sharing etc., to make quick decisions regarding the damage, which helped the company to work on proposed solutions that were perfectly integrated with the problem. This way, the company was able to minimize the threats. The statement drawn by the company's representatives shows that its main objective is to be more focused on improving its supply chain.

Following questions are answered in this case study solution:

  1. The case identifies several aspects of the Nissan response that were particularly beneficial. Expand on the points made in the case to identify the potential costs and benefits of these actions.

  2. What else could Nissan have done to prepare for and respond to the disaster? Try to articulate the costs and benefits of your suggestions.

  3. What could Nissan have done to assess the risk of disruption in their supply chain?

  4. How did Nissan’s product line strategy help or hurt its ability to respond to and recover from the disaster?

Case Study Questions Answers

1. The case identifies several aspects of the Nissan response that were particularly beneficial. Expand on the points made in the case to identify the potential costs and benefits of these actions.

There is no doubt that the information shared by Nissan in response to the disaster that affected the company badly was indeed fruitful and beneficial for stakeholders. From these proposed actions, the company derived multiple benefits. For suppose, the received information helped Nissan by providing a way so that the company could adjust its production calendar in various regions. Doing so made it possible for them to line up their production calendar with Japan's production conditions.

Moreover, the information also benefitted Nissan because it created a possibility for other regions as well to make their valuable contribution and propose plausible solutions in order to combat the issue. The reason is that other regions had this awareness regarding the happenings in Japan, which allowed them to trade their assistance to the company to improve the situational crisis. It is to be noted that with the proposed action, a potential cost was associated, which includes individuals who were managing the crisis at the current site.

During the disaster, supply allocation also gave benefits to Nissan. It made it possible to Nissan to gain high margins and profitability by assigning a supply of goods. The company with this strategy started doing well in terms of profits and sales. Through efficient component part allocation, Nissan was able to meet customer demands during the hard times when the capacity was limited.

Also, the empowering activities of the company urged the company to make flexible decisions quickly. The empowered management was able to handle the situation through rapid decisions without making themselves involved in lengthy procedures of central authority. However, the potential cost associated with this action gave leverage to the employees to exploit the information for their personal benefits, which turned into confusion for teams on the ground when they would get contradicting information related to the disaster.

Finally, the slowing production lines helped the company reduce additional stock and manage the predicted bottlenecks. Also, vacation time shifts in April and May also created additional capacity for the company during summer times.

2. What else could Nissan have done to prepare for and respond to the disaster? Try to articulate the costs and benefits of your suggestions.

There could be other ways and activities too which Nissan might have done in response to the disaster. The company should have inculcated this drill practice in a routine as it would have broadened the horizon of employees and other stakeholders to react appropriately during crisis times. The activity would give benefit the company in a context that employees would gain an adequate number of skills that are normally needed to handle the disaster. Also, employees with sufficient skills might be helpful in reducing the intensity of damage that are emerged after the disaster.

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